US political turmoil boosts demand on safe havens

US political turmoil boosts demand on safe havens

Investors dampened demand on stocks and other risky assets and resorted to safe havens amid expectations President Donald Trump may have an early exit from office after the latest political turmoil.

The Swiss franc resumed its advance against the U.S. dollar for a sixth straight session, hitting a seven-week high of 0.9773.

By the same manner, the Japanese yen traded near its highest level in two weeks at 110.38 against the green currency.

Haven demand also helped gold resume its rally, as it traded at $1263.48 an ounce, resuming its rebound from a low of $1214.13 recorded on May 9.

European shares sagged to a two-week low, trailing losses in Asia, after U.S. shares experienced the worst session in eight months on Wednesday.

The Trump administration selected former FBI Director Robert Mueller to investigate Russia's involvement in the U.S. presidential election last year.

Political woes started after Trump’s firing FBI Director James Comey and reports showing Trump’s disclosure of intelligence information to Russian officials.

“A memo written by Comey surfaced Tuesday alleging that the president asked him to drop an investigation of former National Security Adviser Michael Flynn,” according to Bloomberg.

The British pound, however, stood firm against safe havens franc and yen after a report showing a better than forecast rebound in U.K. retail sales in April.

The pound traded above $1.30 for the first time in nearly eight months to resume its rally that began since Theresa May’s announcement of an early parliamentary election for June 8.

Ahmed Mamdouh

Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at FXComment.com, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

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